Engaging a liquidator in the UAE
A key step in the process of winding up a limited liability company in the UAE is the appointment of a liquidator. Winding up or ‘liquidation’ of an LLC company may be compulsory (court ordered) or voluntary (in accordance with the constitutional document of the company and the Commercial Companies Law 2015).
In both instances, the appointment of a liquidator is mandatory to determine the assets and liabilities of the company and settle liabilities in accordance with the process determined by the court or by the Commercial Companies Law 2015.
A chartered accountant or auditor that is regulated and licensed to practice in the applicable emirate in the UAE will be required to be appointed as liquidator.
In a voluntary winding up, a liquidator is appointed pursuant to a board resolution, resolving to place the company under liquidation and appoint a liquidator.
Once appointed, the liquidator will be responsible for, among other things:
- Preparing an inventory and list of all the assets and liabilities of the company. The manager of the company is required to cooperate with the liquidator and enable access to all company books and records.
- Collection of debts from third parties.
- Paying the company’s creditors and/or selling off company assets to settle debts or loans;
- Submitting the liquidation notification at the Department of Economic Development (DED) and advertising the closure of the LLC in the local gazette for a 45 period;
- Representing the company before the courts if litigation is filed.
The appointment and action of a liquidator for the duration of the process will only be effective against third parties if the board resolution or the court order appointing the liquidator is notarised and entered into the Commercial Register with the Department of Economic Development (DED).
Upon completion of liquidation, the liquidator will provide to each of the shareholders or to the court (in the case of mandatory liquidation) a final account of the liquidation process to be approved by the shareholders in a general assembly or by the court. Once approved, the liquidator will issue a company liquidation certificate.
PRO Partner Group can assist you with your selection of a liquidator and work with you to facilitate the procedural elements and PRO work for the liquidation process.
For information regarding restructuring debt and liquidation in the UAE, please refer to our article here.
For information regarding the practical information on the steps required to liquidate or wind up an LLC see our article here.
For information regarding the practical information on the steps required to deregister a branch in the UAE, see our article here.
How can PRO Partner Group help?
PRO Partner Group can assist you (and work with your appointed legal counsel) with the practical steps to restructure and/or liquidate a limited liability company or close a branch in the UAE. If you need assistance on this or any other related company set up, restructuring or local partner matters in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at firstname.lastname@example.org or complete the contact form below and we will be delighted to assist you.